Interferon alpha (IFN-) along with ribavirin is the standard treatment for patients with chronic HCV infection but this therapy is unable to clear the virus in the majority of patients. Patients who remain non-responders to IFN- /ribavirin are at a high risk of developing liver cirrhosis and cancer. The mechanisms by which HCV infected cells develop resistance to exogenous IFN-/ribavirin are unknown. The long-term goal of this grant is to understand the resistance mechanisms of IFN-/ribavirin combination treatment so that effective strategies can be developed to clear the virus in chronically infected patients and prevent development of liver cirrhosis and hepatocellular carcinoma. We generated the following results that support the new Specific Aims. (i). During the last review of this applicatin we have developed a stable and an HCV persistently infected Huh-7 cell culture system with very high viral titer (>100 days). Using a long-term treatment approach we showed that interferon lambda (IFN-?) effectively clears the HCV replication from persistently infected cells whereas HCV replication in the persistently infected culture cells remained resistant to IFN- and ribavirin combination treatment. (ii). We published that HCV infection induces ER-stress and autophagy response and down regulates the expression of interferon alpha-receptor 1 (IFNAR1) leading to a defective Jak-Stat signaling, reduced phosphorylation /nuclear translocation of Stat1, Stat2 and impaired antiviral response. (iii). Our results show that ribavirn and IFN- synergistically inhibit virus replication when treated at very early stage of an infected culture with low viral titer. Each agent inhibits translation by preventing the polyribosomes load to the HCV IRES mRNA using two separate mechanisms. Furthermore, we found that persistently infected HCV cells develop resistance to ribavirin due to impaired uptake of ribavirin. (iv). We showed that HCV infection does not alter IFN-? receptor-1 expression. IFN-? activates Stat3, AKT and MAPK pathways to inhibit HCV replication and overcomes IFN- /ribavirin resistance mechanisms suggesting that type III interferon system plays a very important role in the clearance of hepatitis C virus infection. Our results suggest that the IFN-? antiviral mechanism against HCV is novel and operates beyond the classical Jak-Stat signaling. Studied proposed in this grant application will validate IFN-/ribavirin resistant mechanisms using chronically infected human hepatocytes from responders and non-responders. We will also explore the unique antiviral mechanism by which type III interferon (IL-29, IL-28A and IL-28B) inhibits HCV replication in IFN-a resistant cells. Our new hypothesis is that HCV infection of hepatocytes triggers the ER stress response and thereby down regulates the expression of interferon alpha receptor 1 (IFNAR1) leading to the defective Jak-Stat signaling, chronic infection and an impaired antiviral response to IFN-. We postulate that since IFN-? strongly inhibits HCV replication in persistently infected cells, exploring its biological role and antivira mechanisms should provide an alternative therapy for chronic HCV patients who are non-responders. The hypothesis will be tested under the following three Specific Aims. In Specific Aim 1, we will determine the mechanism of defective Jak-Stat signaling in HCV infected human liver. In Specific Aim 2, we will investigate the synergy and resistance mechanisms of ribavirin in HCV infection. In Specific Aim 3, we will establish the distinct signal transduction and antiviral gene regulation mechanisms by which IFN-? effectively clears HCV in Huh-7 cells with defective Jak-Stat signaling. If these experiments are successful it will increase our understanding of the IFN-resistance mechanisms, overcome the resistance and clear the infection and prevent hepatocellular carcinoma.